Self-Audit Series #13: Diabetic Test Strips

The 2020 National Diabetes Statistics Report, analyzed data through 2018 and found that there are over 34 million Americans with diabetes (approximately 1 in 10 Americans). Additionally, there are 88 million Americans with prediabetes (approximately 1 in 4 Americans). Based off this data, there are more than 120 million people in the United States that are living with diabetes or prediabetes. Due to the high volume of claims for diabetic test strips, they continue to receive significant attention during third-party audits. Follow the tips below to be prepared if you get an audit.

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Purchasing Requirements

  • PBM contracts require that pharmacies purchase test strips from vendors that are licensed distributors in your state
  • OptumRx® requires purchases from suppliers that have received NABP’s Drug Distributor Accreditation (DDA) (formerly known as “VAWD® Accreditation”)
  • Caremark® and Express Scripts® also require test strips to be purchased directly from the manufacturer or from authorized distributors only.
  • Consider purchasing test strips from one approved wholesaler to make things easier
  • Major test strip manufacturer’s have lists of “authorized distributers” on their websites
  • Beware of secondary wholesalers which are subsidiaries of authorized distributors who may not show up on the authorized list (e.g., River City and Masters)


  • Make sure that prescriptions have calculable instructions – use as directed is not accepted upon an audit
  • Confirm that you are billing the correct NDC – many test strips have a “retail” version and a “Medicare/Medicaid only” version
  • Verify the NDC billed is for the correct package size – do not bill the #100 count NDC if you are dispensing the #50 count box
  • Dispense only one NDC per claim – you should not dispense 1 x #100 count and 1 x #50 count to equal #150 test strips
  • Dispense the package size that is closest to the total quantity – if the prescription is for #200, dispense 2 x #100 count, not 4 x #50 count; some plans prohibit dispensing smaller packages
  • Submit the accurate days’ supply based on the quantity and instructions
  • If you are billing DMEPOS for Medicare beneficiaries, make sure that you submit the correct modifier to indicate if the patient is using insulin (KX) or not using insulin (KS)
  • Some payers may require a diagnosis code at the time of billing to support the clinical need

Additional Newsline Article References for Self-Audit

Jennifer Ottman, CPhT